California Supreme Court Rejects Another Planet Entertainment’s $20M

California Supreme Court Rejects Another Planet Entertainment’s $20M

In a crucial blow to one of the Bay Area’s leading entertainment companies, the California Supreme Court has ruled that Another Planet Entertainment cannot benefit from its pandemic woes through its insurer because compensation for COVID-related business interruptions is not part of the settlement’s action. The courts ruled that, contrary to the promoter’s $20 million claim, the presence of COVID-19 did not constitute the type of property damage that their policy with Vigilant Insurance covers, according to SFist.

For those who missed the courtroom drama, Another Planet, which operates venues like the Greek Theater and the Fox Theater, has held its own because the virus spreading in buildings rendered them unusable; Therefore, it should be considered physical damage. However, the courts were having none of it, and the California Supreme Court, led by Chief Justice Patricia Guerrero, unanimously rejected the company’s argument. Guerrero put it succinctly: “Property insurance does not cover a specific use; “It covers the property itself… Direct physical loss or damage to the property requires a clear, provable physical alteration to the property,” SFist noted.

Not only did the ruling negatively impact Another Planet’s parade, it also sent a clear message to other companies eyeing insurance payouts for COVID closures. Players like the Los Angeles Lakers and Major League Baseball had supported Another Planet, but to no avail.

The decision is in line with a broader consensus that has formed in courts across the country that essentially says you can’t claim insurance against a virus just because it stops foot traffic to your venues. In fact, according to Business Insurance, the court’s language was brutally clear: The presence of the virus and resulting public health requirements do not result in a change in physical property necessary for insurance coverage. This sets the tone for what could likely lead to a cascade of rejections for companies seeking similar solutions.